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District Court Stays Action Pending Appellate Review of Motion to Compel Privileged Documents

The district court had previously ordered plaintiffs to produce certain documents to the extent that documents containing communications between plaintiff and its non-attorney patent agents were not subject to the attorney-client privilege. The district court ordered a one-week stay to allow the filing of any appeal. Rather than producing the documents in compliance with the order, the plaintiffs filed a petition for Writ of Mandamus with the United States Court of Appeals for the Federal Circuit.

The district court elected to stay plaintiffs’ production “pending disposition of the petition or other order of the Court of Appeals” and that production remained stayed pending resolution by the Federal Circuit. “A failure to stay the production would have forced the Circuit to consider an emergency motion to stay. Plaintiffs knew that their decision to forego compliance with the discovery order endangered the trial date.”

Shortly thereafter, Samsung filed two notices regarding the PTAB’s recent institution of Inter Partes Review proceedings of all claims of the asserted patents in the case. Based on Samsung’s representations,” the Court observes that all asserted claims from all asserted patents in the instant matter are presently under IPR review. Given Samsung’s pending instant motion for a stay, the Court sua sponte ordered the parties to set forth in supplemental briefing arguments as to how, if at all, the IPR institutions affect Samsung’s pending Motion to Stay.”

The district court analyzed the familiar three-factor test for deciding to stay an action: “In deciding whether to stay litigation, courts usually consider three factors: (1) whether a stay will unduly prejudice or present a clear tactical disadvantage to the nonmoving party; (2) whether a stay will simplify the issues in question and trial of the case; and (3) whether discovery is complete and whether a trial date has been set.”

The district court found that the first factor clearly weighed in favor of a stay. “Regarding the first prong, the Court concludes no undue prejudice or clear tactical disadvantage would result from a stay. Rather, by withholding relevant documents, Plaintiffs present a clear tactical disadvantage to the Defendants, who would be otherwise forced to proceed with their defenses and in furtherance of their counterclaims without all relevant discovery at their disposal. (See, e.g., Mot. at 7) (‘Without a stay, Plaintiffs will have succeeded in shielding from discovery and trial documents likely relevant to validity, infringement, and perhaps the very enforceability of the asserted patents.’) Accordingly, this factor weighs in favor of granting the stay.”

The district court also determined that the second prong weighed in favor of a stay. “Specifically, by refusing to comply with this Court’s order, Plaintiffs have introduced uncertainty that can only be resolved through the Federal Circuit’s final disposition of the matter. Once resolved, the issues will be both clarified and simplified alike. That is, once the issue is resolved, the Court expects to receive clear guidance as to how it should proceed. Moreover, the PTAB recently instituted IPR proceedings for all asserted patents and all asserted claims. (Dkt. Nos. 194, 197) Because all asserted claims are currently under review, and further because the full estoppel provisions under 35 U.S.C. ยง 315 will apply to all Defendants, the issues relating to invalidity will be simplified or eliminated entirely depending on the outcome of those proceedings. Accordingly, this weighs in favor of a stay as well.”

Turning to the third prong, the district court concluded that this prong also favored a stay under the narrow circumstances of this case. “Regarding the third and final prong, although the trial date has been set and the vast majority of discovery is complete in this case, Plaintiffs have potentially placed that trial date in jeopardy by refusing to comply with this Court’s order. Without a stay, Plaintiffs ask Defendants to prepare for a trial without all the information the Court deemed necessary to proceed. This dynamic creates a potential and significant risk that may: (1) require additional or duplicative discovery; (2) delay trial; or (3) require the Court to try the case again. Finally, although ordinarily Defendants’ delay in seeking IPR review would weigh against granting a stay as to the instituted IPRs, given the uncertainty and delay Plaintiffs caused by failing to comply with this Court’s Order, the Court finds this factor weighs in favor of a stay as well under these narrow circumstances.”

Accordingly, the district court found that a stay of the action was appropriate.

Queens University at Kingston v. Samsung Electronics Co., LTD, Case No. 2:14CV53-RG-RSP
The authors of are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. For more information about this case, contact Stan Gibson at 310.201.3548 or